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What is Guaranteed Auto Protection?
Financial Safeguard
Guaranteed Auto Protection (GAP) is an important safeguard in the event your vehicle is damaged beyond repair or stolen. If a total loss occurs, your loan balance may exceed the actual cash or market value of the vehicle that is covered by insurance. This shortfall continues to be a financial obligation that is waived with GAP insurance.
After you buy your car the vehicle value drops the fastest.
This is the rate of the Loan/Lease Payoff.
Total Loss Protection protects you if there is a difference between your insurance company settlement and your remaining loan or lease balance.
Example:
you buy a $24,000 car, and 7 months later you get in an accident that totals the car.
The amount you owe on the car is $20,000.
The value of the car is $16,000.
This leaves you owing $4,000.
But if you want to include the typical insurance deductible...
you could be owing as much as $4,500!
$20,000 (Loan/Lease Payoff)
-16,000 (Actual Cash Value)
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$4,000 (GAP)
+ 500 (Insurance Deductible)
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$4,500 (Customer Financial Responsibility)
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